Common use of Letter of Credit Security Deposit Clause in Contracts

Letter of Credit Security Deposit. Contemporaneously with the execution of this Lease, Tenant shall provide to Landlord a security deposit in immediately available funds in the amount of $759,703.00 (the “Interim Security Deposit”), which Interim Security Deposit shall be governed by the terms of this Section 6 applicable to the Security Deposit (defined below). Tenant shall be required to replace the Interim Security Deposit with a Letter of Credit (as defined in the Basic Lease Information) in accordance with the terms of Exhibit J no later than sixty (60) days from the date of this Lease, and upon delivery to Landlord of such Letter of Credit, Landlord shall return promptly to Tenant the Interim Security Deposit in the manner set forth below. Any time after the first day of the 66th month of the Lease Term, provided that there is no Event of Default by Tenant under the Lease, Tenant may elect to replace the Letter of Credit with a Security Deposit in the amount of $80,181.50 (the “Security Deposit”). Contemporaneously with written notice by Tenant of such election, Tenant shall pay to Landlord the Security Deposit, which shall be held by Landlord to secure Tenant’s performance of its obligations under this Lease. Upon such payment, Landlord shall return the Letter of Credit to Tenant, and Tenant shall have no further obligation to provide a Letter of Credit. The Security Deposit is not an advance payment of Rent or a measure or limit of Landlord’s damages upon an Event of Default (as defined in Section 17). Landlord may, at Landlord’s discretion, from time to time following an Event of Default and without prejudice to any other remedy, use all or a part of the Security Deposit to perform any obligation Tenant fails to perform hereunder or in connection with Landlord’s remedies under this Lease. Following any such application of the cash Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit to its original amount. Subject to the requirements of, and conditions imposed by, Laws applicable to security deposits under commercial leases, Landlord shall, within the time required by applicable Law, return to Tenant the portion of the Security Deposit remaining after deducting all damages, charges and other amounts permitted by Law. Landlord and Tenant agree that such deductions shall include, without limitation, all damages and losses that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any Event of Default by Tenant. Unless required otherwise by applicable Law, the Security Deposit may be commingled with other funds, and no interest shall be paid thereon. If Landlord transfers its interest in the Premises, Landlord shall assign the Security Deposit to the transferee and, upon the actual transfer of the Security Deposit (and the delivery to Tenant of an acknowledgement of the transferee’s responsibility for the Security Deposit if required by Law), Landlord thereafter shall have no further liability for the return of the Security Deposit. The amount of the Security Deposit is not a limitation on the liability of Tenant under the Lease.

Letter of Credit Security Deposit. Contemporaneously (a) Tenant shall deliver to Landlord at the time it executes this Lease, an unconditional, irrevocable, transferable letter of credit (the “Letter of Credit”), in an amount equal to the sum of Five Hundred Twenty Thousand Dollars ($520,000) (the “Base LC Amount”), plus the amount of the Tenant Allowance (i.e., Two Hundred Forty-Seven Thousand Eight Hundred Seventy-Seven Dollars ($247,877) (collectively, the “LC Amount”) and satisfying the requirements set forth below in this Paragraph 32. Tenant shall not be obligated to make a Security Deposit; however, all cash sums which Landlord may hold hereunder as a result of drawing upon the Letter of Credit shall be held as a Security Deposit and the term “Security Deposit” as used herein, refers to such sums. If Tenant fails to pay Base Rent, Additional Charges for Expenses and Taxes, or other Rent or charges due hereunder, or otherwise defaults with the execution respect to any provision of this Lease, Landlord may use all or any portion of the Security Deposit for the payment of any Rent due hereunder, to pay any other sum to which Landlord may become obligated by reason of Tenant’s default, or to compensate Landlord for any loss or damages which Landlord may suffer as a result of such default (including, without limitation, amounts which Landlord may be entitled to recover pursuant to Section 1951.2 of the California Civil Code). Landlord may in its sole discretion (but shall not be required to) use the Security Deposit or any portion thereof to cure any failure by Tenant shall provide to perform any of its obligations hereunder or to compensate Landlord for any damages Landlord incurs as a security deposit in immediately available funds in result of Tenant’s failure to perform any of its covenants or obligations hereunder, it being understood that any use of the amount of $759,703.00 (the “Interim Security Deposit”), which Interim Security Deposit shall be governed by the terms not constitute a bar or defense to any of Landlord’s remedies under this Section 6 applicable Lease or at law. Landlord shall have no obligation to segregate the Security Deposit from its general funds or to pay interest thereon. (defined below). Tenant shall be required to replace the Interim Security Deposit with a 1) The Letter of Credit (as defined shall be issued by a financial institution, and in form and substance, acceptable to Landlord and any Mortgagee, in their respective sole discretion, with an original term of no less than one year and automatic extensions through the Basic end of the Term of this Lease Information) in accordance with the terms of Exhibit J no later than and sixty (60) days thereafter. Landlord shall not unreasonably withhold its approval of such a financial institution if it is a national bank, or a bank branch located in the United States (with an office in the United States allowing the Letter of Credit to be presented to and paid by such office pursuant to procedures acceptable to Landlord in its reasonable discretion) with assets of the issuing bank or bank branch in excess of Twenty Billion Dollars ($20,000,000,000). If Landlord determines at any time, in good faith, that either (A) the issuing bank or bank branch has assets of less than Twenty Billion Dollars ($20,000,000,000), (B) the issuing bank does not have, or ceases to have, a long term rating of at least BBB+ or (C) the issuing bank or bank branch has or intends to close or cease operations from the date of this Leaseissuing bank branch, and upon delivery to then Landlord of such Letter of Credit, Landlord shall return promptly to may require that Tenant the Interim Security Deposit in the manner set forth below. Any time after the first day of the 66th month of the Lease Term, provided that there is no Event of Default by Tenant under the Lease, Tenant may elect to replace the Letter of Credit with a Security Deposit Letter of Credit from a different financial institution acceptable to Landlord, in the reasonable exercise of its discretion, within fifteen (15) business days after Tenant’s receipt of notice of such requirement from Landlord. The Letter of Credit shall (A) be a stand-by, at-sight, irrevocable letter of credit; (B) be payable to Landlord, its Mortgagee or their assignees (any of the foregoing, the “Beneficiary”); (C) require that any draw on the Letter of Credit shall be made only upon receipt by the issuer of a letter signed by a purported authorized representative of the Beneficiary certifying that the Beneficiary is entitled to draw on the Letter of Credit pursuant to this Lease; (D) allow partial and multiple draws; (v) be fully transferable by Landlord; and (E) provide that it is governed by the Uniform Customs and Practice for Documentary Credits (1993 revisions) or the International Standby Practices (ISP 98). Tenant shall keep the Letter of Credit, at its expense, in full force and effect until the sixtieth (60th) day after the Expiration Date or other termination of this Lease, to insure the faithful performance by Tenant of all of the covenants, terms and conditions of this Lease, including, without limitation, Tenant’s obligations to repair, replace or maintain the Premises. The Letter of Credit shall provide at least sixty (60) days’ prior written notice to Landlord and the Beneficiary of cancellation or material change, or failure to extend the term thereof. (2) At any time after a Draw Event (as defined below) occurs, the Beneficiary may present its written demand for payment of the entire face amount of the Letter of Credit (or, at the Beneficiary’s sole election, for payment of a portion of the amount of $80,181.50 (the “Security Deposit”)Letter of Credit as is required to compensate Landlord for damages incurred, with subsequent demands at the Beneficiary’s sole election as Landlord incurs further damages) and the funds so obtained shall become due and payable to the Beneficiary. Contemporaneously The Beneficiary may retain such funds to the extent required to compensate Landlord for damages incurred, or to reimburse Landlord as provided herein, in connection with written notice by Tenant of any such electiondefault or other Draw Event, Tenant shall pay to Landlord the Security Deposit, which and any remaining funds shall be held by Landlord to secure as cash Security Deposit for Tenant’s obligations hereunder. A “Draw Event” shall mean any of the following: (A) a “default” by Tenant in the performance of its obligations under this Lease. Upon Lease occurs; (B) an event has occurred which, with the passage of time or giving of notice or both, would constitute Default, where Landlord is prevented from, or delayed in, giving such payment, notice because of an Insolvency Proceeding; (C) Tenant is the subject of an Insolvency Proceeding; (D) the Lease is terminated by Landlord shall return due to a Tenant Default; (E) the Letter of Credit to Tenant, and Tenant shall have no further obligation to provide is not replaced with a Letter of Credit. The Security Deposit Credit from a different financial institution if and when required by Paragraph 32(a)(1); and (F) the Letter of Credit is not an advance payment of Rent or a measure or limit of Landlord’s damages upon an Event of Default extended by the date which is sixty (as defined in Section 17). Landlord may, at Landlord’s discretion, from time to time following an Event of Default and without prejudice to any other remedy, use all or a part of the Security Deposit to perform any obligation Tenant fails to perform hereunder or in connection with Landlord’s remedies under this Lease. Following any such application of the cash Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit 60) days prior to its original amount. Subject to the requirements of, and conditions imposed by, Laws applicable to security deposits under commercial leases, Landlord shall, within the time required by applicable Law, return to Tenant the portion of the Security Deposit remaining after deducting all damages, charges and other amounts permitted by Law. Landlord and Tenant agree that such deductions shall include, without limitation, all damages and losses that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any Event of Default by Tenant. Unless required otherwise by applicable Law, the Security Deposit may be commingled with other funds, and no interest shall be paid thereon. If Landlord transfers its interest in the Premises, Landlord shall assign the Security Deposit to the transferee and, upon the actual transfer of the Security Deposit (and the delivery to Tenant of an acknowledgement of the transferee’s responsibility for the Security Deposit if required by Law), Landlord thereafter shall have no further liability for the return of the Security Deposit. The amount of the Security Deposit is not a limitation on the liability of Tenant under the Leaseexpiration.

Letter of Credit Security Deposit. Contemporaneously with Tenant will provide Landlord on the execution date this Lease is executed by Tenant an irrevocable letter of this Lease, Tenant shall provide to Landlord a credit as set forth in Item 8 of Article 1 as security deposit in immediately available funds in for the amount performance of $759,703.00 (the “Interim Security Deposit”), which Interim Security Deposit shall be governed by the terms of this Section 6 applicable to the Security Deposit (defined below)hereof by Tenant. Tenant shall be required to replace the Interim Security Deposit with a Letter of Credit (as defined in the Basic Lease Information) in accordance with the terms of Exhibit J no later than sixty (60) days from the date of this Lease, It is expressly understood and upon delivery to Landlord of such Letter of Credit, Landlord shall return promptly to Tenant the Interim Security Deposit in the manner set forth below. Any time after the first day of the 66th month of the Lease Term, provided agreed that there is no Event of Default by Tenant under the Lease, Tenant may elect to replace the Letter of Credit with a Security Deposit in the amount of $80,181.50 (the “Security Deposit”). Contemporaneously with written notice by Tenant of such election, Tenant shall pay to Landlord the Security Deposit, which shall be held by Landlord to secure Tenant’s performance of its obligations under this Lease. Upon such payment, Landlord shall return the Letter of Credit to Tenant, and Tenant shall have no further obligation to provide a Letter of Credit. The Security Deposit is not an advance payment of Rent or a measure or limit of Landlord’s damages upon an Event in case of Default (as defined in Section 17)default by Tenant. If Tenant defaults beyond applicable notice and cure periods with respect to any provisions of this Lease, Landlord may, at Landlord’s discretionbut shall not be required to, from time to time following an Event of Default and time, without prejudice to any other remedy, use apply or retain all or a any part of the Security Deposit letter of credit for the payment of any Rent or any other sum in default, or for the payment of any other amount which Landlord may spend or become obligated to perform spend by reason of Tenant’s default, or to compensate Landlord for any obligation Tenant fails other loss or damage which Landlord may suffer by reason of Tenant’s default, including, without limitation, costs and attorneys’ fees incurred by Landlord to perform hereunder or in connection with Landlord’s remedies under this Lease. Following any such application recover the possession of the cash Security DepositPremises. Upon the occurrence of any event of default by Tenant beyond applicable notice and cure periods, Landlord may, from time to time, without prejudice to any other remedy provided herein or provided by law, use such funds to the extent necessary to make good any arrears of rentals and any other damage, injury, expense or liability caused to Landlord by such event of default. Should Landlord exhaust the funds available per the Letter of Credit prior to its designated drawn down dates, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit available credit to its original amount. Subject amount relevant to the requirements ofschedule set forth in Item 8 of Article 1. If Tenant is not then in default of this Lease, and conditions imposed by, Laws applicable the Letter of Credit shall be reduced in a manner as set forth in Item 8 of Article 1. The Security deposit shall be returned to security deposits under commercial leases, Landlord shall, Tenant within the time required by applicable Law, return to “Applicable Period” after the date Landlord receives possession of the Premises from Tenant at the portion completion of the lease term. The “Applicable Period” is fourteen (14) days where Landlord has no claim upon the Security Deposit remaining after deducting all damages, charges and other amounts permitted by Law. or the claim of Landlord and Tenant agree that such deductions shall include, without limitation, all damages and losses that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any Event of Default by Tenant. Unless required otherwise by applicable Law, the Security Deposit may be commingled with other funds, and no interest shall be paid thereon. If Landlord transfers its interest in the Premises, Landlord shall assign the Security Deposit to the transferee and, upon the actual transfer of the Security Deposit (and the delivery to Tenant of an acknowledgement of the transferee’s responsibility for the Security Deposit if required by Law), Landlord thereafter shall have no further liability for the return of the Security Deposit. The amount of the Security Deposit is not a limitation on only for defaults in the liability payment of Rent or any other charges payable by Tenant under this Lease, and thirty (30) days where the Leaseclaim of Landlord includes amounts reasonably necessary to repair damages to the Premises caused by Tenant. Tenant agrees that it will not assign or encumber or attempt to assign or encumber the monies deposited with Landlord as the Security Deposit and that Landlord and its successors and assigns shall not be bound by any such actual or attempted assignment or encumbrance.

Letter of Credit Security Deposit. Contemporaneously (a) Tenant shall deliver to Landlord at the time it executes this Lease the security deposit set forth in the Basic Lease Information (the “Security Deposit”) as security for Tenant’s faithful performance of Tenant’s obligations hereunder. If Tenant fails to pay Base Rent, Additional Charges for Expenses and Taxes, or other Rent or charges due hereunder, or otherwise defaults with the execution respect to any provision of this Lease, Landlord may use all or any portion of the Security Deposit for the payment of any Rent due hereunder, to pay any other sum to which Landlord may become obligated by reason of Tenant’s default, or to compensate Landlord for any loss or damages which Landlord may suffer as a result of such default (including, without limitation, amounts which Landlord may be entitled to recover pursuant to Section 1951.2 of the California Civil Code). Landlord may in its sole discretion (but shall not be required to) use the Security Deposit or any portion thereof to cure any failure by Tenant to perform any of its obligations hereunder or to compensate Landlord for any damages Landlord incurs as a result of Tenant’s failure to perform any of its covenants or obligations hereunder, it being understood that any use of the Security Deposit shall provide not constitute a bar or defense to any of Landlord’s remedies under this Lease or at law. Landlord shall have no obligation to segregate the Security Deposit from its general funds or to pay interest thereon. (b) At Tenant’s option, in lieu of the Security Deposit Tenant may deliver to Landlord a security deposit in immediately available funds in at the amount time it executes this Lease an unconditional, irrevocable, transferable letter of $759,703.00 credit (the “Interim Security DepositLetter of Credit”), which Interim in an amount equal to the required Security Deposit shall be governed by and satisfying the terms of requirements set forth below in this Section 6 applicable to the Security Deposit Paragraph 32. (defined below). Tenant shall be required to replace the Interim Security Deposit with a 1) The Letter of Credit (as defined shall be issued by a financial institution, and in form and substance, acceptable to Landlord and any Mortgagee, in their respective sole discretion, with an original term of no less than one year and automatic extensions through the Basic end of the Term of this Lease Information) in accordance with the terms of Exhibit J no later than and sixty (60) days thereafter. Landlord shall not unreasonably withhold its approval of such a financial institution if it is a national bank, or a bank branch located in the United States (with an office in the United States allowing the Letter of Credit to be presented to and paid by such office pursuant to procedures acceptable to Landlord in its reasonable discretion) with assets of the issuing bank or bank branch in excess of Twenty Billion Dollars ($20,000,000,000). If Landlord determines at any time, in good faith, that either (A) the issuing bank or bank branch has assets of less than Twenty Billion Dollars ($20,000,000,000), (B) the issuing bank does not have, or ceases to have, a long term rating of at least BBB+ or (C) the issuing bank or bank branch has or intends to close or cease operations from the date of this Leaseissuing bank branch, and upon delivery to the Landlord of such Letter of Credit, Landlord shall return promptly to may require that Tenant the Interim Security Deposit in the manner set forth below. Any time after the first day of the 66th month of the Lease Term, provided that there is no Event of Default by Tenant under the Lease, Tenant may elect to replace the Letter of Credit with a Security Deposit Letter of Credit from a different financial institution acceptable to Landlord, in the reasonable exercise of its discretion, within fifteen (15) business days after Tenant’s receipt of notice of such requirement from Landlord. The Letter of Credit shall (A) be a stand-by, at-sight, irrevocable letter of credit; (B) be payable to Landlord, its Mortgagee or their assignees (any of the foregoing, the “Beneficiary”); (C) require that any draw on the Letter of Credit shall be made only upon receipt by the issuer of a letter signed by a purported authorized representative of the Beneficiary certifying that the Beneficiary is entitled to draw on the Letter of Credit pursuant to this Lease; (D) allow partial and multiple draws; (v) be fully transferable by Landlord; and (E) provide that it is governed by the Uniform Customs and Practice for Documentary Credits (1993 revisions) or the International Standby Practices (ISP 98). Tenant shall keep the Letter of Credit, at its expense, in full force and effect until the sixtieth (60th) day after the Expiration Date or other termination of this Lease, to insure the faithful performance by Tenant of all of the covenants, terms and conditions of this Lease, including, without limitation, Tenant’s obligations to repair, replace or maintain the Premises. The Letter of Credit shall provide at least sixty (60) days’ prior written notice to Landlord and the Beneficiary of cancellation or material change, or failure to extend the term thereof. (2) At any time after a Draw Event (as defined below) occurs, the Beneficiary may present its written demand for payment of the entire face amount of the Letter of Credit (or, at the Beneficiary’s sole election, for payment of a portion of the amount of $80,181.50 (the “Security Deposit”)Letter of Credit as is required to compensate Landlord for damages incurred, with subsequent demands at the Beneficiary’s sole election as Landlord incurs further damages) and the funds so obtained shall become due and payable to the Beneficiary. Contemporaneously The Beneficiary may retain such funds to the extent required to compensate Landlord for damages incurred, or to reimburse Landlord as provided herein, in connection with written notice by Tenant of any such electiondefault or other Draw Event, Tenant shall pay to Landlord the Security Deposit, which and any remaining funds shall be held by Landlord to secure as cash Security Deposit for Tenant’s obligations hereunder. A “Draw Event” shall mean any of the following: (A) a “default” by Tenant in the performance of its obligations under this Lease. Upon Lease occurs; (B) an event has occurred which, with the passage of time or giving of notice or both, would constitute Default, where Landlord is prevented from, or delayed in, giving such payment, notice because of an Insolvency Proceeding; (C) Tenant is the subject of an Insolvency Proceeding; (D) the Lease is terminated by Landlord shall return due to a Tenant Default; (E) the Letter of Credit to Tenant, and Tenant shall have no further obligation to provide is not replaced with a Letter of Credit. The Security Deposit Credit from a different financial institution if and when required by Paragraph 32(b)(1); and (F) the Letter of Credit is not an advance payment of Rent or a measure or limit of Landlord’s damages upon an Event of Default extended by the date which is sixty (as defined in Section 17). Landlord may, at Landlord’s discretion, from time to time following an Event of Default and without prejudice to any other remedy, use all or a part of the Security Deposit to perform any obligation Tenant fails to perform hereunder or in connection with Landlord’s remedies under this Lease. Following any such application of the cash Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit 60) days prior to its original amount. Subject to the requirements of, and conditions imposed by, Laws applicable to security deposits under commercial leases, Landlord shall, within the time required by applicable Law, return to Tenant the portion of the Security Deposit remaining after deducting all damages, charges and other amounts permitted by Law. Landlord and Tenant agree that such deductions shall include, without limitation, all damages and losses that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any Event of Default by Tenant. Unless required otherwise by applicable Law, the Security Deposit may be commingled with other funds, and no interest shall be paid thereon. If Landlord transfers its interest in the Premises, Landlord shall assign the Security Deposit to the transferee and, upon the actual transfer of the Security Deposit (and the delivery to Tenant of an acknowledgement of the transferee’s responsibility for the Security Deposit if required by Law), Landlord thereafter shall have no further liability for the return of the Security Deposit. The amount of the Security Deposit is not a limitation on the liability of Tenant under the Leaseexpiration.

Letter of Credit Security Deposit. Contemporaneously Except as otherwise set forth below, concurrent with the Tenant’s execution of this Lease, Tenant shall provide to deposit with Landlord a security deposit in immediately available funds an unconditional, irrevocable letter of credit in the amount of Eighty Six Thousand Seventy Nine and 54/100 Dollars ($759,703.00 86,079.54) in a form reasonably acceptable to Landlord and issued by a bank satisfactory to Landlord (the “Interim Security DepositLetter of Credit”), which Interim Security Deposit shall be governed by the terms of this Section 6 applicable to the Security Deposit (defined below). Tenant shall be required to replace the Interim Security Deposit with a The Letter of Credit shall provide that it is assignable by Landlord shall permit partial draws, and shall either (as defined in i) expire on the Basic Lease Information) in accordance with the terms of Exhibit J no later than date which is sixty (60) days from after the date expiration or termination of this Lease (the “LC Date”) or (ii) be automatically self-renewing until the LC Date. If any Letter of Credit is not renewed at least thirty (30) days prior to the expiration thereof or if Tenant holds over in the Premises without the consent of Landlord after the expiration or termination of this Lease, Landlord may draw upon the Letter of Credit and hold the proceeds thereof as security for the performance of Tenant’s obligations under this Lease. Landlord may draw on the Letter of Credit (or the proceeds thereof) to remedy defaults by Tenant in the payment or performance of any of Tenant’s obligations under this Lease. If Landlord shall have so drawn upon delivery the Letter of Credit (or the proceeds thereof), Tenant shall upon demand deposit with Landlord a sum equal to the amount so drawn by Landlord. Provided Tenant is not in Default under this Lease and Tenant has surrendered the Premises to Landlord in accordance with all of the terms and conditions of this Lease, on or before the LC Date: (a) Landlord shall promptly return to Tenant the Letter of Credit (or the proceeds thereof) then held by Landlord or (b) if Landlord shall have drawn upon such Letter of Credit (or the proceeds thereof) to remedy events of default by Tenant in the payment or performance of any of Tenant’s obligations under this Lease, Landlord shall return to Tenant the proceeds of the Letter of Credit remaining in Landlord’s possession. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the Letter of Credit upon the occurrence of any event of default on the part of Tenant under this Lease. If there shall occur an event of default under this Lease Landlord may, but without obligation to do so, and without notice, draw upon the Letter of Credit, in part or in whole, to cure any default of Tenant and/or to compensate Landlord shall return promptly for any and all damages of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s default. Tenant agrees not to Tenant the Interim Security Deposit interfere in the manner set forth below. Any time after the first day any way with payment to Landlord of the 66th month proceeds of the Letter of Credit, either prior to or following a “draw” by Landlord of any portion of the Letter of Credit, regardless of whether any dispute exists between Tenant and Landlord as to Landlord’s right to draw from the Letter of Credit. No condition or term of this Lease Term, provided that there is no Event of Default by Tenant under the Lease, Tenant may elect shall be deemed to replace render the Letter of Credit conditional to justify the issuer of the Letter of Credit in failing to honor a drawing upon such Letter of Credit in a timely manner. Additionally, Landlord’s draw and application of all or any portion of the proceeds of the Letter of Credit shall not impair any other rights or remedies provided under this Lease or under applicable Law and shall not be construed as a payment of liquidated damages. Tenant agrees and acknowledges that Tenant has no property interest whatsoever in the Letter of Credit or the proceeds thereof and that, in the event Tenant becomes a debtor under any chapter of the Federal Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate shall have any right to restrict or limit Landlord’s claim and/or rights to the Letter of Credit and/or the proceeds thereof by application of Section 502(b)(6) of the Federal Bankruptcy Code. The Letter of Credit shall also provide that Landlord may, at any time and without notice to Tenant and without first obtaining Tenant’s consent thereto, transfer all or any portion of its interest in and to the Letter of Credit to another party, person or entity holding an ownership or security interest in the Project (or the direct or indirect ownership interests in Landlord); as a part of the assignment by Landlord of its rights and interests in and to this Lease. In the event of a transfer of Landlord’s interest in the Building, Landlord shall transfer the Letter of Credit, in whole or in part, to the transferee and thereupon Landlord shall, without any further agreement between the parties, be released by Tenant from all liability therefor, and it is agreed that the provisions hereof shall apply to every transfer or assignment of the whole or any portion of said Letter of Credit to a new landlord. In connection with any such transfer of the Letter of Credit by Landlord, Tenant shall, at Tenant’s sole cost and expense, execute and submit to the issuing bank such applications, documents and instruments as may be necessary to effectuate such transfer; provided, however, that Landlord shall be responsible for paying the issuing bank’s transfer and processing fees in connection therewith. Landlord and Tenant acknowledge and agree that in no event or circumstance shall the Letter of Credit or any renewal thereof or any proceeds thereof be (i) deemed to be an asset or property of the Tenant, (ii) deemed to be or treated as a “security deposit” within the meaning of California Civil Code Section 1950.7, (iii) subject to the terms of such Section 1950.7, or (iv) intended to serve as a “security deposit” within the meaning of such Section 1950.7. The parties hereto (A) recite that the Letter of Credit is not intended to serve as a security deposit and such Section 1950.7 and any and all other laws, rules and regulations applicable to security deposits in the commercial context (“Security Deposit Laws”) shall have no applicability or relevancy thereto and (B) waive any and all rights, duties and obligations either party may now or, in the amount future, will have relating to or arising from the Security Deposit Laws. In lieu of $80,181.50 providing the Letter of Credit, concurrently with Tenant’s execution of this Lease, Tenant shall deposit with Landlord a security deposit (the “Security Deposit”) in the amount of Eighty Six Thousand Seventy Nine and 54/100 Dollars ($86,079.54). Contemporaneously with written notice , as security for the faithful performance by Tenant of such election, Tenant shall pay to Landlord the Security Deposit, which shall be held by Landlord to secure Tenant’s performance all of its obligations under this Lease. Upon such paymentIf Tenant defaults with respect to any provisions of this Lease, including, but not limited to, the provisions relating to the payment of Rent, the removal of property and the repair of resultant damage, Landlord shall return the Letter of Credit may, without notice to Tenant, and Tenant but shall have no further obligation not be required to provide a Letter of Credit. The Security Deposit is not an advance payment of Rent or a measure or limit of Landlord’s damages upon an Event of Default (as defined in Section 17). Landlord may, at Landlord’s discretion, from time to time following an Event of Default and without prejudice to any other remedy, use apply all or a any part of the Security Deposit to perform for the payment of any obligation Rent or any other sum in default and Tenant fails to perform hereunder or in connection with Landlord’s remedies under this Lease. Following any such application of the cash Security Depositshall, Tenant shall pay to Landlord on upon demand the amount so applied in order to therefor, restore the Security Deposit to its original amount. Subject to the requirements of, and conditions imposed by, Laws applicable to security deposits under commercial leases, Landlord shall, within the time required by applicable Law, return to Tenant the Any unapplied portion of the Security Deposit remaining after deducting shall be returned to Tenant, or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder, within sixty (60) days following the expiration of the Lease Term. Tenant shall not be entitled to any interest on the Security Deposit. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, or any successor statute, and all damagesother provisions of law, charges and other amounts permitted now or hereafter in effect, which (i) establish the time frame by Law. Landlord and Tenant agree which a landlord must refund a security deposit under a lease, and/or (ii) provide that such deductions shall includea landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, without limitationto repair damage caused by a tenant or to clean the premises, it being agreed that Lessor may, in addition, claim those sums specified in this Section above and/or those sums reasonably necessary to compensate Lessor for any loss or damage caused by Lessee’s default of the Lease, as amended hereby, including, but not limited to, all damages and losses that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result rent due upon termination of any Event Lease pursuant to Section 1951.2 of Default by Tenantthe California Civil Code. Unless required otherwise by applicable LawIf Tenant initially delivers the Letter of Credit, Tenant shall have the right to replace such Letter of Credit with the Security Deposit may be commingled with other funds, and no interest shall be paid thereon. If Landlord transfers its interest in the Premises, Landlord shall assign at any time thereafter by delivering the Security Deposit to Landlord (in which event Landlord shall promptly return the transferee andLetter of Credit to Tenant). In addition, upon if Tenant initially delivers the actual transfer Security Deposit, Tenant shall have the right to replace such Security Deposit with the Letter of Credit at any time thereafter by delivering the Letter of Credit to Landlord (in which event Landlord shall promptly return the Security Deposit (and the delivery to Tenant of an acknowledgement of the transferee’s responsibility for the Security Deposit if required by LawTenant), Landlord thereafter shall have no further liability for the return of the Security Deposit. The amount of the Security Deposit is not a limitation on the liability of Tenant under the Lease.